Wall Street may offer a significant buying opportunity.
Tony Dwyer, Canaccord Genuity, believes that the market turmoil will lead to a record rally.
The firm's chief market strategist, said Tuesday on CNBC's Trading Nation that "We're going from the summer of indigestion to the year-end chance." "We are just not there yet."
Just four consecutive negative sessions were recorded by the Dow and S&P 500. This activity comes after Monday's sharp decline in the indices. The Dow is currently down 5% from its record high, while the S&P 500 (tech-heavy Nasdaq) are down 4%.
Dwyer stated that "it's a multimonth correction in the wider market." Given yesterday's near 2% drop, we are neither overbought nor oversold at the moment.
Dwyer is a long-term bull in the market who put on pullback watch last spring and downgraded it to neutral in April. He lists heated exchanges about Washington's fiscal cliff, Wednesday's Federal Reserve decision regarding interest rates, and the fallout from China developer Evergrande among the rational near-term downside catalysts.
He said, "These are great excuses to profit-taking."
Dwyer's Tuesday research note addressed investors indicated that the Street would likely experience a short-term reflex rally. He is more concerned about the intermediate readings.
Dwyer wrote that "there has been already a sharp bounce from Monday's intraday high and the catalysts have yet to resolve, so we would expect some more indigestion as well as begin adding risk back into market on any further weakness,"
He believes that the pullback in the near-term will be only a fraction of what he had hoped.
Dwyer also plans to purchase financials, industrials and materials. Materials and energy are currently in correction territory. They are down more than 10% from 52-week highs.
He believes that the euphoria around the economic reopening trades has now passed, and they will be crucial to a record-breaking market breakout within the next few months.
Dwyer stated, "It's important to...look at what the year end opportunity is."
Christopher Hayes, CNBC, contributed to this report.
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